On November 22, 2016, just 10 days before the Department of Labor’s final rule on overtime exemptions was to become effective, a federal judge in Texas issued a preliminary injunction halting its implementation.
The Department of Labor (“DOL”) final rule would have doubled the salary that “white collar” employees must earn to be exempt from overtime and minimum wage requirements from $455 per week ($23,660 per year) to $913 per week ($47,476 per year). The final rule would have also raised the exemption threshold for “highly compensated employees” who are still subject to a more minimal duties test, from $100,000 to $134,004 annually.
The emergency motion for a preliminary injunction was filed in October by twenty-one states, and then consolidated with another lawsuit brought by the U.S. Chamber of Commerce and other business groups. The parties asserted that the DOL exceeded its authority in raising the salary threshold and requiring adjustments to the threshold every three years.
The issuance of the preliminary injunction means the current overtime rule will remain in effect while the court determines the validity of the new final rule. Therefore, as it stands, the new final rule will no longer become effective on December 1, 2016, but could still become effective in the future. Employers can therefore continue operating under the existing rule until the courts reach a final decision.
For additional background on the new rule, please also refer to our previous Alert, “FLSA Overtime Exemption Salary Threshold Update,” sent on May 27, 2016.